WASHINGTON—A federal judge on Monday approved a $3.4 billion settlement over mismanaged Indian royalties in a case that represents the largest class-action settlement ever approved against the U.S. government.

Elouise Cobell of Browning, Mont., claimed in the 15-year-old suit that for more than a century, U.S. officials systematically stole or squandered billions in royalties intended for American Indians in exchange for oil, gas, grazing and other leases.

U.S. District Judge Thomas Hogan, in approving the settlement after a daylong hearing, said the legitimacy of Cobell’s claims could not be questioned.

“The government mismanaged these resources on a staggering scale,” Hogan said.

The settlement does not make up for the losses Indian tribes suffered for more than a century, Hogan added, but “at least it provides some certainty” to hundreds of thousands of individual Indians who will now receive payments of least $1,000 each from the government. Many will receive substantially more money.

Cobell, a member of the Blackfeet Tribe, will receive $2 million, and three other named plaintiffs will receive payments ranging from $150,000 to $200,000 each.

“The process has gone on long enough,” Hogan said, noting that hundreds of potential beneficiaries have died in the 15 years the case has wound through the courts and Congress.

The government and lawyers representing Cobell settled the lawsuit in December 2009 after years of court battles and appeals. Congress approved the settlement at the end of last year, and President Barack Obama signed it into law. But the case still needed Hogan’s approval, which he provided late Monday after a daylong hearing on the merits of the case and legal fees to be assessed.

In a statement, Obama said the decision “marks another important step forward in the relationship between the federal government and Indian Country.”

Resolving the dispute was a priority for his administration, Obama said. He promised to engage in “government-to-government consultations with tribal nations” regarding the land consolidation aspect of the settlement to ensure that it moves quickly and fairly.

Interior Secretary Ken Salazar said the settlement not only resolves the contentious 15-year Cobell litigation, “but also honorably and responsibly turns the page on an unfortunate chapter in the department’s history, demonstrating President Obama’s commitment to reconciliation and empowerment for American Indian nations.”

Under the settlement approved Monday, $1.5 billion will go to at least 300,000 Indian account holders. Another $1.9 billion will be used to buy back and consolidate tribal land that has become subdivided and difficult to manage over the years. An additional $60 million will go to a scholarship fund for Indian students.

In a controversial decision, Hogan awarded Cobell’s lawyers a total of $99 million—less than half the $223 million they were seeking but nearly double the $50 million government lawyers had recommended.

Hogan denied a request by Cobell’s legal team for $10.5 million in legal expenses incurred since the case was filed in 1996.

Cobell, 65, is recuperating after cancer surgery in April and did not appear at Monday’s hearing. But she read a lengthy statement over speaker phone in which she called the settlement historic and unprecedented.

“The settlement isn’t perfect. I do not think it compensates all for all the losses sustained, but I do think it is fair and it is reasonable,” Cobell said. “That is what matters: a fair resolution has been achieved.”

If the settlement was rejected, “there would be many more years of litigation with little possibility of a more favorable resolution,” she added.

Hogan, in remarks from the bench, echoed that sentiment and called Cobell a hero.

“She’s accomplished more for individual Native Americans that any other individual I can think of in recent history,” Hogan said, noting that Cobell put her reputation and her health at risk in “an unprecedented effort I’ve not seen before in a class-action case.”

Dennis Gingold, a Washington lawyer who took the case 15 years ago after Cobell begged him, said the victory belonged to her.

“If it wasn’t for Elouise Cobell, we would not have done this,” he told Hogan.

Not all Indian groups were happy. More than a dozen people testified Monday against the settlement, with most of the opposition centered on legal fees that several speakers called outrageous.

Margie Eder of Cheney, Kan., a member of the Fort Peck Assiniboine & Sioux Tribes, accused Gingold and other Cobell lawyers of stealing from the people they were claiming to represent. After wishing Cobell good health, Eder turned to the lawyers and shouted, “Lord God rebukes you, because you want to line your pockets by robbing people of that which is not yours to take.”

Gingold said he took the case when no one else would and has not been paid in more than a decade.

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